In a press conference Wednesday following the to hold interest rates steady, Chair Jerome Powell clearly stated his position on the Federal Reserve’s independence.
“We haven’t lost it. I don’t believe we will. I certainly hope we won’t,” Powell said.
This remark comes several weeks after Powell made public the Justice Department’s serving the targeting him over his June 2025 congressional testimony about the $2.5 billion renovation of the Fed’s headquarters.
The subpoenas are only one side of the story. For months, President Donald Trump has directed criticism at the Fed’s construction project, frustrated by what he sees as a slow pace in cutting rates. From the administration’s viewpoint, the Fed is holding back economic growth. Last August, Trump posted on Truth Social: “Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW. IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL.”
But Powell maintained that the Fed has stayed cautious on rate cuts, balancing its dual mandate of managing inflation and strengthening the job market.
“We at the Fed will keep doing our jobs with objectivity, integrity, and a deep commitment to serving the American people,” Powell stated at Wednesday’s press conference. Since September 2024, the Fed has implemented 175 basis point cuts.
Beyond those comments, the Fed chair remained quiet on other political issues, responding with a mild “I have nothing for you on that” to further questions about the Fed’s subpoena and the dollar’s decline.
The Fed kept rates steady Wednesday at 3.50% to 3.75% as the central bank works to balance the conflicting realities of the dollar’s slump and the stock market’s rally. The 10–2 vote to hold rates steady included dissents from Governors Stephen Miran and—a recent Trump appointee—Christopher Waller. Both pushed for a quarter-point rate cut, aligning with the White House’s demands.
Apart from the political back-and-forth, Powell emphasized the Fed’s careful approach to future rate cuts, ensuring any upcoming decision will be guided by a precise analysis of inflation data—much of which is currently skewed by trade policy, as Powell noted tariffs caused a “one-time price increase” on consumer goods.
Powell’s term as chair ends in May. While it hasn’t been confirmed who will replace him, Trump has narrowed his search to four candidates: Fed Governor Christopher Waller, National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, and chief investment officer, who has on prediction markets in recent weeks to become the front-runner to succeed Powell.
The Fed chair offered advice to whoever becomes his successor: “Don’t get into elected politics.”